The government has terminated a contract with Seaborne Freight to provide extra ferries in the event that the UK leaves the European Union without a deal in March.
The decision to award the £14million contract in December even though Seaborne did not have any ships was heavily criticised by opposition politicians and others.
A Department for Transport spokeswoman has now said the contract was terminated after Seaborne Freight’s backer Arklow Shipping decided to step back from the deal.
The contract with Seaborne Freight to provide extra ferries in the case of a no-deal Brexit has been cancelled (pictured is the Port of Ramsgate)
The contract was one of several signed by ministers as a contingency plan in case no deal leaves the main Dover-Calais route (file) in chaos
She said: ‘It became clear Seaborne would not reach its contractual requirements with the government. We have therefore decided to terminate our agreement.
‘The government is already in advanced talks with a number of companies to secure additional freight capacity – including through the Port of Ramsgate – in the event of a no-deal Brexit.’
The spokeswoman said no taxpayer money had been transferred to Seaborne. She added that for commercial reasons the government had previously not been able to name Arklow Shipping’s involvement.
Britain’s EU membership means that trucks now drive smoothly through border checks within the 28-nation bloc.
But after a no-deal Brexit, even a few minutes’ delay at customs for each truck could mean vehicles backed up at ports and queuing on feeder roads on both sides of the Channel.
Trucks could become backed up in queues at ports due to delays at customs if there’s a no-deal Brexit (pictured is the port of Dover)
The Department for Transport spokeswoman also said the government stood by the due diligence carried out on Seaborne.
The company had also been criticised when its business terms and conditions showed references to placing ‘any meal/order’, prompting speculation on social media that it had copied the format from a takeaway delivery company.
Seaborne has since updated its website.
The firm’s website read: ‘It is the responsibility of the customer to thoroughly check the supplied goods before agreeing to pay for any meal/order.’
It also said: ‘Delivery charges are calculated per order and based on [delivery details here].’
In another section, the terms read: ‘Users are prohibited from making false orders through our website.’
It added: ‘Seaborne Freight (UK) Limited reserves the right to seek compensation through legal action for any losses incurred as the result of hoax delivery requests and will prosecute to the full extent of the law.’
The firm was accused of copying its terms and conditions from a takeaway shop in January (pictured is Tom Watson highlighting the gaffe)
Labour deputy Tom Watson spotted the glaring error in Seaborne Freight’s published terms and conditions.
He tweeted: ‘Seaborne Freight. No ships, no trading history and website T&Cs copied and pasted from a takeaway delivery site…’
Ilford MP Mike Gapes posted: ‘Well. Well. Fish and Chips, Curry, Chinese, Kebab or Pizza. Seaborne Freight certainly have plans to Take Away our money.’
Transport secretary Chris Grayling previously defended handing the no deal ferry contract to Seaborne as the government was ‘supporting new businesses’.
Mr Grayling told BBC Radio 4’s Today programme that Seaborne had been properly vetted before being chosen, after concerns were raised over its ability to fulfil the contract.
He said: ‘It’s a new start-up business, Government is supporting new business and there is nothing wrong with that.
Transport secretary Chris Grayling, pictured, previously defended giving the contract to Seaborne Freight
‘We have looked very carefully at this business and have put in place a tight contract that makes sure they can deliver for us.
‘This has been looked at very carefully by a team of civil servants who have done due diligence.’
Seaborne aimed to operate freight ferries from Ramsgate in Kent to the Belgian port of Ostend, beginning with two ships in late March and increasing to four by the end of the summer.
It was established two years ago and has been in negotiations about running freight ferries between Ramsgate and Ostend, but no services are currently running.
Narrow berths in the port mean there are few suitable commercial vessels available.
In a statement at the end of December, the company said it had been working since 2017 on plans to reintroduce ferry sailings from Ramsgate from early 2019.
Britain is on course to leave the EU at the end of next month without a deal unless Prime Minister Theresa May can convince the bloc to reopen the divorce agreement she reached in November and then sell it to sceptical British lawmakers.